Is there another method for stable profits through hedging?
Many people only know that 'opening a contract = high risk',
but very few seriously study the robust strategy of hedging + funding rate arbitrage.
Today, I will share a simple logic—how to use a coin-denominated contract to short with 1x leverage, allowing your assets to retain value while earning interest.
First, let's discuss the core logic:
Why do perpetual contracts have funding rates?
Its essence is:
To keep the contract price as close to the spot price as possible,
the system requires long and short positions to pay each other interest to maintain balance.
In simple terms:
If market sentiment is bullish, with more longs and fewer shorts → Longs have to pay interest to shorts
If you short, you can collect interest (funding rate is positive)
Now, let's talk about the key strategy: Coin-denominated contract, shorting BTC with 1x leverage.
Your approach is as follows:
First, buy spot BTC (for example, 100,000 USDT)
Then use this 100,000 USDT in BTC to open a 1x short position in a coin-denominated contract.
What happens at this point?
✅ BTC rises? You make money on the spot, but lose on the short → Offset
✅ BTC falls? You lose on the spot, but make money on the short → Still offset
✅ Total assets valued in USDT remain basically unchanged!
Meanwhile, if your short position has a positive funding rate,
You are quietly earning interest every day!
The three major advantages of this strategy:
No liquidation risk: Because of 1x leverage and spot hedging, theoretically there's no liquidation risk.
Lock in market value: Regardless of ups and downs, your total value remains stable.
Collecting funding fees: As long as the funding rate is positive, you can earn interest like a fixed deposit (annualized high could even exceed 50%-100%).
If you want to achieve stable returns in the cryptocurrency market, you don't have to be a gambler.
Funding rate arbitrage + hedging is a set of strategies that are often overlooked but very practical,
suitable for those with large amounts of capital who don’t want to operate frequently but wish to preserve value.
When the market is unclear, it's better to passively earn interest.
Sometimes, patience is more valuable than being aggressive.
